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Government Procurement Failure: BC Ministry of Education Case Study

Apologies for the lack of posts. I’ve been in business mode – both helping a number of organizations I’m proud of and working on my own business.

For those interested in a frightening tale of inept procurement, poor judgement and downright dirty tactics when it comes to software procurement and government, there is a wonderfully sad and disturbing case study emerging in British Columbia that shows the lengths a government is willing to go to shut out open source alternatives and ensure that large, expensive suppliers win the day.

The story revolves around a pickle that the province of British Columbia found itself in after a previous procurement disaster. The province had bought a student record management system – software that records elementary and secondary students’ grades and other records. Sadly, the system never worked well. For example, student records generally all get entered at the end of the term, so any system must be prepared to manage significant episodic spikes in usage. The original British Columbia Electronic Student Information System (BCeSIS) was not up to the task and frequently crashed and/or locked out teachers.

To make matters worse, after spending $86M over 6 years it was ultimately determined that BCeSIS was unrecoverably flawed and, as the vendor was ending support, a new system needed to be created.

Interestingly, one of the Province’s school districts – the District of Saanich – decided it would self-fund an open source project to create an alternative to BCeSIS. Called OpenStudent, the system would have an open source license, would be created using locally paid open source developers, could be implemented in a decentralized way but still meet the requirements of the province and… would cost a fraction of that proposed by large government vendors. The Times Colonist has a simple article that covers the launch of OpenStudent here.

Rather than engage Saanich, the province decided to take another swing at hiring a multinational to engage in a IT mega-project. An RFP was issued to which only companies with $100M in sales could apply. Fujitsu was awarded a 12 year contract with costs of up to $9.4M a year.

So in other words, the province sprung some surprise requirements on the District of Saanich that forced it to kill an open source solution that could have saved tax payers millions and employed British Columbians, all while exempting a multinational from meeting the same requirements. It would appear that the province was essentially engaged in a strategy to kill OpenStudent, likely because any success it enjoyed would have created an ongoing PR challenge for the province and threatened its ongoing contract with Fujitsu.

While I don’t believe that any BC government official personally profited from this outcome, it is hard – very hard indeed – not to feel like the procurement system is deeply suspect or, at worst, corrupted. I have no idea if it is possible, but I do hope that these documents can serve as the basis for legal action by the District of Saanich against the Province of British Columbia to recapture some of their lost expenses. The province has clearly used its purchasing power to alter the marketplace and destroy competitors; whether this is in violation of a law, I don’t know. I do know, however, that it is in violation of good governance, effective procurement and general ethics. As a result, all BC tax payers have suffered.

Addendum: It has been suggested to me that that one reason the BC government may be so keen to support Fujitsu and destroy competing suppliers is because it needs to generate a certain amount of business for the company in order for it to maintain headcount in the province. Had OpenStudent proved viable and cheaper (it was estimated to cost $7-10 per student versus $20 for Fujistu’s service), Fujistu might have threatened to scale back operations which might have hurt service levels for other contracts. Unclear to me if this is true or not. To be clear I don’t hold Fujistu responsible for anything here – they are just a company trying to sell their product and offer the best service they can. The disaster described above has nothing to do with them (they may or may not offer amazing products, I don’t know); rather, it has everything to do with the province using its power to eliminate competition and choice.

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Yeah, I read the report. Just one of a plethora of cases like this in Canada’s governments. We would be well advised to follow a) the Open Contracting initiative and b) similar procurement policies as the ones in the UK. There, when companies do not deliver on time, in the cost envelope, they are banished from all government request for tenders for several years.